Treasury is getting ready to once again start maneuvering to keep the federal government from defaulting on its debt, and possibly setting off undesirable financial consequences, the agency said Friday.
The United States is currently at the federal debt limit, but for the last 12 months hasn’t had to suffer the consequences of it — thanks to a congressional-imposed suspension, which expires Sunday. That means, Treasury officials say, they will have to take “extraordinary measures” beginning Monday to keep the federal government’s head above fiscal water.
Unless Congress acts quickly to raise the limit, those measures will include putting a stop to a planned $46 billion investment in the federal employee pension fund, which is scheduled for June. By halting the reinvestments, the government effectively borrows that money to help stay under the debt. However, by law, that money must be repaid before the debt limit can be increased again.
Other measures the Treasury will likely take are drawing down a currency stabilization fund and imposing moratoriums on state and local government deposits, USA Today reported.